$8,000 tax credit for homebuyers expires Friday

Tuesday

Apr 27, 2010 at 12:01 AMApr 27, 2010 at 5:22 PM

With only days left before the homebuyer tax credit expires, Jean Larkin was trying not to feel the pressure of the looming April 30 deadline. Larkin, like many other potential homebuyers, was busy Sunday checking out open houses on the last weekend before the tax credit deadline.

Maribeth Conway

With only days left before the homebuyer tax credit expires, Jean Larkin is feeling the pressure of the looming deadline.

Larkin, like many other anxious house-hunters, was busy Sunday checking out open houses before the tax credit deadline on Friday. She sold her home in Easton, Mass., and has been looking to buy a townhouse in a neighboring town.

As a current home owner, Larkin is eligible for a tax credit up to $6,500 on a new home. First-time homebuyers, or anyone who has not owned a home in the past three years, are eligible for a tax credit up to $8,000.

“It’s not necessarily my motivation, but it’s accelerating the process,” said Larkin, outside an open house in Braintree, Mass.

The homebuyer credit was put in place as part of the federal stimulus package in 2009. Potential buyers and real estate agents agree the tax credit is not necessarily making buyers out of non-buyers, but it’s incentive to get a deal done.

Jennifer and Dan Schlieff of Braintree said they think the Friday deadline is the reason they had 23 people at their first open house two weeks ago, and possibly the reason they received two cash offers that day.

“To have 23 people is unusual,” said Pat Fellmann, Schlieff’s mother and real estate agent. “Usually we have five to seven parties, maybe 12. To receive two offers, cash offers, is extremely unusual.”

The boost is mainly occurring in the $200,000 to $500,000 home price range – homes appealing to first-time buyers or couples who are downsizing, said Pat MacNaught, an agent at Coldwell Banker.

The bump in sales also is affecting other areas of the housing market, such as home inspections.

“The phones have been ringing off the hook,” said Tina Walker, who works for Tiger Home Inspection of Braintree.

Sean Rizzo, owner of Tiger Home Inspections, said, “inspectors are coming in on their days off. We say ‘get it while you can.’ It’s a nice problem to have, one we haven’t had in three years.”

James Brock, owner of Boston Home Inspectors, is working longer hours and more days, “but I’m not complaining,” he said. Just six months ago, he didn’t have enough inspections to consistently fill a five-day workweek. Many inspectors left the field with the downturn in the housing market, he said.

Bill Goldman of The Bradford Co. said Friday’s deadline is not necessarily bringing new customers to the market. He believes a shaky job market and the possibility of rising mortgage rates leave potential clients wary.

Instead, he views the tax credit deadline as simply speeding up the process for existing customers.

“Everything is happening faster,” he said.

While some customers are house-hunting in a frenzy, others are not.

“I’m not rushing,” said Anh Tho Pham, a potential first-time buyer who has been house searching for a year. She said she won’t be pushed into a purchase. “I want to feel like this is my home when I walk in. I haven’t had that feeling yet.”

Patriot Ledger writer Maribeth Conway may be reached at mconway@ledger.com.

Avoid delays to get your tax credit

Most Realtors agree that during this crunch week it’s necessary to skip straight to the purchase-and-sales agreement, bypassing the signing of an offer sheet

Make sure the purchase-and-sales agreement is contingent on a home inspection, said real estate agent Norman Tuttle of The Granite Group

“Bottom line, if it feels right buy it,” said Matt Wood, of Success! Real Estate. But if you’re hesitant to buy because you want to see the ‘next one’ than it’s probably not the right house, he said.

Key requirements of the tax credit

Existing home owners can get a tax credit of $6,500 on a primary residence if they lived in their last home for at least five years within the past eight years.

First-time homebuyers, or anyone who has not owned a home in the past three years, are eligible for a tax credit up to $8,000.

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